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Publisher Description

INTRODUCTION The Sarbanes-Oxley Act (SOX) enacted into law in 2002 is considered one of the most significant pieces of legislation since the Securities Acts of 1933 and 1934. An important change to the existing regime came with Sections 302 and 404 which require management to provide an assessment of the design and effectiveness of firms' internal controls, as well as auditors to provide an opinion on management's assessment of controls. In addition, Auditing Standard No. 2 now requires that auditors provide a separate opinion on firms' internal controls based on an independent evaluation. As a result of these mandates and the corresponding increase in scrutiny of internal controls, a number of companies received adverse opinions on their internal controls, which likely impacted to some extent the relationship with their auditors. Despite internal control problems, a client and an auditor may decide to continue their engagement and work through the problems together. Alternatively, a client may change audit firms because of irreparable damage to the relationship due to the conflict, or in order to seek another firm that may help the client earn an unqualified opinion. This study contributes to the growing literature on internal controls and the impact of SOX by investigating the factors that affect the decision to switch auditors, either by dismissal or resignation, following the issuance of an adverse opinion on internal controls over financial reporting (ICOFR) by auditors.

GENRE
Business & Personal Finance
RELEASED
2011
October 1
LANGUAGE
EN
English
LENGTH
37
Pages
PUBLISHER
The DreamCatchers Group, LLC
SELLER
The Gale Group, Inc., a Delaware corporation and an affiliate of Cengage Learning, Inc.
SIZE
265.5
KB

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